aside Italy Avoids A Crisis With A May 31st Agreement On A New Governing Body

NEW ITALIAN CABINET

With the republican President Donald Trump sucking up most of the oxygen regarding US news headlines, some major stories have not received adequate coverage. One has to do with the crazy politics of Italy which is the euro zone’s third-largest economy. If the recent politics had not been worked out, there was worry that Italy would be the next country to withdraw from the European Union (EU), but it looks like this drastic measure has been averted as Italy reached an agreement on a new government on the 31st of May 2018.

To describe Italian politics at any point in time would be more difficult than explaining the inner workings of President Trump’s administration to an outsider. Suffice it to say that Italian politics was at the brink of a major crisis until just yesterday, the 31st of May 2018.

On May 31, 2018, Srephanie Pitrelli and Griff Wittely of the Washington Post penned the following report, “Italy reaches a deal on a new government, ending a crisis that rattled global markets”

Excerpts:

“Italy appeared Thursday (5/31/18) to step back from the brink of a continent-rattling political crisis , with officials agreeing to a deal that averts the threat of fresh elections and puts two populist parties in charge of the euro zone’s third-largest economy.”

“The agreement was the latest twist in a topsy-turvy week for Italian politics, one that on Tuesday( had sent global markets tumbling amid jitters that the country was careening toward a new vote and a possible euro exit. Investors feared an even greater populist surge if a fresh election were held.”

“But negotiations Wednesday and Thursday yielded an unexpected breakthrough, culminating in a presidential announcement late Thursday night that the country’s new government will be sworn in Friday (6/1/18).”

“The anti-establishment Five Star Movement and the far-right League will govern together, forming the first purely populist coalition to lead a core Western European country since the creation of the European Union. And they will get their preferred prime minister, the little-known law professor Giuseppe Conte.”

ITALY’S FAR RIGHT LEAGUE

“We will work resolutely to improve the quality of life of all Italians,” Conte announced Thursday night after the president, Sergio Mattarella, formally asked him to lead a new government.”

“The president had balked at the populist parties’ original choice for finance minister, Paolo Savona, an 81-year-old who has been fiercely critical of the E.U. and has suggested Italy should abandon the euro.”

“In a concession, the parties proposed a new pick for finance minister, Giovanni Tria, a low-profile economics professor at the Tor Vergata University of Rome. Savona, meanwhile, will be shifted to European affairs minister.”

“Although technocrats will take some of the government’s top jobs, most observers believe that the leaders of the two parties — Five Star’s Luigi Di Maio and the League’s Matteo Salvini — will be the real powers behind the new administration.”

“Both will officially be vice premiers, with Di Maio also taking the economic development ministry and Salvini running the powerful interior ministry, which oversees Italian law enforcement and border control.”

“Salvini, whose party ran on a stridently anti-immigration platform, has backed the mass deportation of migrants in a country that has become the top entry point for those crossing the Mediterranean to reach Europe.”

Di Maio’s party was founded by comedian Beppe Grillo less than a decade ago with the aim of shaking up a sclerotic political establishment and using the Internet to give voters a more direct say in their democracy. The party is considered a political chameleon, with ever-shifting positions and influences from both left and right.

“Thank you everyone! The Government of Change is now real!” Di Maio wrote on Facebook late Thursday.

M5S leader Luigi Di Maio (L) and League’s Matteo Salvini

Although the League and Five Star are sharply at odds on key issues, they share a skepticism toward the euro and the E.U. that has unnerved both the European establishment and investors.

Neither party ran its campaign on a euro exit. But after the president vetoed the parties’ finance minister pick, the likelihood of new elections spawned fears that the populists would turn the next vote into a referendum on the country’s membership in the currency club.

Thursday’s agreement suggests that neither party wanted to go through with that — at least not right now.

GIUSEPPE CONTE

“Just to be precise, we’ve never spoken about ‘no euro,’ never,” Conte said on television. “On the opposite, that was never in the contract and was never an issue in the agenda.”

“The threat of a euro exit could have been deeply damaging to an economy that suffers from massive public debt and had seen its borrowing costs rise as markets grew anxious.”

“The new government will be under immediate pressure to improve economic conditions. Italy has struggled with low growth and high unemployment for the past decade.”

Mariano Rajoy

Those woes have created political turmoil across southern Europe in recent years. Even as it eased in Italy on Thursday night, it was building in Spain, where longtime Prime Minister Mariano Rajoy is expected to be forced out of office in a confidence vote on Friday.

Rajoy’s center-right People’s Party has been snared in corruption scandals, and on Thursday lost the support of a key ally. Rajoy is expected to be replaced by Pedro Sánchez, leader of the center-left Socialists.

9 comments

Gronda, recognizing the EU is imperfect, it has a lot to offer to Italy. I hope things work. I am hopeful some leaders in the UK come to their senses and realize the overall harm that Brexit will do to them and alter their exit plans. They need to also realize that the Russian influence and sloppy reporting led to a misinformed audience. We cannot get a do over with Trump, but the UK can still avoid a very poor decision. Keith

Russia’s interference with the Brexit vote has largely been debunked. Facebook investigated suspicious ads and concluded that there were three ads created by the Moscow-linked Internet Research Agency costing 97 cents.

“They did not feature any direct information about the EU referendum, known as Brexit. Rather, they mentioned immigration. The three ads also targeted U.S. audiences.

Britain’s Electoral Commission had requested that Facebook look into any dubious activity in last year’s Brexit vote after an earlier probe by the firm into alleged Russian meddling in the U.S. election uncovered more than 3,000 ads targeting U.S. voters.”

There is a Jan. 10, 2018 Guardian report that provides a bit more context:

“The senators point out that Ukip and its then-leader, Nigel Farage, did not just fan anti-EU sentiment but also “criticised European sanctions on Russia, and provided flattering assessments of Russian President Putin”.

“The report adds that although officially the Russian government asserted its neutrality on Brexit, its English-language media outlets RT and Sputnik covered the referendum campaign extensively and offered ‘’systematically one-sided coverage’’.

“The senators also challenge the adequacy of the investigations by Facebook and Twitter into the allegations of widespread social media interference by the Russians during the referendum. They reference University of Edinburgh research showing more than 400 Russian-run Twitter accounts that had been active in the US election had also been actively posting about Brexit.”

“In addition, the senators noted that research conducted by a joint team of experts from the University of California at Berkeley and Swansea University reportedly identified 150,000 Twitter accounts with various Russian ties that disseminated messages about Brexit.”

“The report also points to the vast flow of Russian money into the UK, including the London property market. It records how the Metropolitan police noted that a total value of £180m in properties in the UK had been put under investigation as possibly purchased with corrupt proceeds by secretive offshore companies.”

Gronda, like in the US, good dialogue around the pros and cons of making decisions like working with the EU is hard with fervent feelings. There are legitimate concerns raised by the “leave base.” Watching an interview with an EU academic expert, the EU is imperfect, but it has helped the countries like Italy, Spain, Greece and the UK. The EU gets little credit when things go well, but it gets blamed by politicians who don’t want to accept responsibility. The following can be said about ANY relationship. You have to work hard to make it work. One of the challenges facing the EU that is not discussed is the aging environment in several countries. The costs and liabilities of greater numbers of retirees has harmed France, Italy, Greece, etc. Some hard changes are necessary to make this work. Keith

This wave of anti-establishment/isolationism which is spreading as a virus across Europe is possibly the greatest threat since the end of WWII.
Although the EU is flawed in many matters the unification of laws and regulations allowed a far greater degree of equality across the states than any one nation would enact.
A large number of people seemed to have forgotten that many projects in their locations have been funded by EU money.
Regrettably the Brexit issue is a genie out of a bottle and to try to force it back in one created an angry backlash amongst the ill-informed which would lead to the stupidity of attacks on other races. All we can hope for, paradoxically is a continuing ineptitude and in-fighting in the Leave factions which will result in a classic ‘Fudge’ compromise